Which of the following exchange rate policies uses a target exchange rate, but allows the target to change?
A) fixed exchange rate
B) flexible exchange rate
C) moving target
D) crawling peg

Question

Quizplus · Accepted Answer

The crawling peg exchange rate policy uses a target exchange rate, but allows the target to change gradually over time, according to preset criteria. This allows for some flexibility in dealing with market shocks or changes in economic conditions, while still providing some stability and predictability in exchange rates.

Which of the Following Exchange Rate Policies Uses a Target